13 July 2007

Rail and the environment

[S]ome trains on rural lines, such as the diesel Sprinter, are less efficient than 4x4s because they are often almost empty. Douglas Alexander, when he was Transport Secretary, said last year: “If ten or fewer people travel in a Sprinter, it would be less environmentally damaging to give them each a Land Rover Freelander and tell them to drive.”

The better environmental choice between alternatives is not always obvious, and a lot of damage can be done by people in powerful positions prejudging how environmental objectives are to be achieved. They would do better to help specify these goals, and allocate funds for their achievement, but to contract out the actual achievement to people who will be motivated to do so efficiently and quickly. A Social Policy Bond regime would encourage the exploration and application of the best ways of achieving the specified goals, and it would do so impartially. It would not assume, for instance, that rail, because it has apparently been the sounder environmental alternative in the past, will always continue to be so, under all circumstances. No handful of politicians or experts, however eminent or well meaning, can hope to keep track of the multifarious changing facts in the way that markets do. The information and the motivation are just not there.

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Social Policy Bonds

See the Social Policy Bonds website for overviews and links to articles, papers, news and more about Social Policy Bonds. Click on the image below to download a 2400-word article, published by the Institute of Economic Affairs, London.

Social Policy Bonds in 2400 words

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Social Policy Bonds in the media

9 October 2015: An article by Greg Bearup on the genesis of the Social Policy Bond idea, and application of a version of it in Australia appears in the Weekend Australian Magazine. (The article can also be downloaded as a pdf from here.)

October 2013: Professor Robert Shiller of Yale University, is named as one of the three winners of the 2013 Nobel Prize in Economics. His Nobel Prize lecture (pdf) delivered on 8 December, mentions Social Policy Bonds. Professor Shiller has for many years encouraged my work on Social Policy Bonds, beginning in late 1996 when he sent me this letter.

3 May 2012: An audio talk by Nobel Prize winner Professor Robert Shiller at the London School of Economics, in which Social Policy Bonds are briefly mentioned, is available here.